Bitcoin, like most other cryptocurrencies, is experiencing pricing difficulties. Some technical signs, on the other hand, may indicate that the bottom is nearing.
To say the least, the last several weeks have been difficult for the entire cryptocurrency industry. In just the previous seven days, the overall market value has dropped by nearly $300 billion.
Bitcoin is trading at roughly $42,000 at the time of this writing, down 11% in the last seven days. The remainder of the market has also plummeted.
Ethereum is down 17.5 percent, Bitcoin Cash is down 16.6%, Solana is down 19 percent, and so on.
The Relative Strength Index (RSI), a widely used indicator, may indicate that the bottom is nearing.
This is a metric that quantifies the pace and change of price fluctuations and represents a momentum oscillator. It swings back and forth between 0 and 100.
When the RSI exceeds 70, the asset is deemed overbought, and when it falls below 30, the asset is considered oversold.
The RSI was at its lowest position yesterday, January 9th, since the May meltdown. It was last at this low point in March 2020, during the COVID crash.
What this means is that on two consecutive occasions in the not-too-distant past, when Bitcoin’s RSI fell to the levels it is now, it signified some sort of local bottom, and the price rose significantly in the months after.
The Bitcoin fear and greed index – a gauge for current sentiment across the market based on multiple variables like as volatility, market momentum, social media, surveys, domination, trends, and so on – might be another probable bottom indicator.
The index indicates that the market is in a condition of “severe fear” at the time of writing.